China is expected to overtake Australia as the world’s leading producer of lithium as early as next year, consultancy Fastmarkets said on Wednesday, signaling a shift driven by Beijing’s strategic focus on critical minerals and continued state support for domestic miners.
Chinese lithium output is projected to surpass Australia’s by 8,000 to 10,000 metric tons in 2025, up from third place globally in 2023. The rise is largely attributed to aggressive investment in mining lepidolite, a lithium-rich ore found in abundance in southern China, despite higher extraction costs and potential environmental impact.
“China’s got a very clear strategy to develop its mineral resources,” said Paul Lusty, head of battery raw materials research at Fastmarkets, speaking on the sidelines of the consultancy’s Lithium and Battery Raw Materials Conference in Las Vegas.
Fastmarkets forecasts that by 2035, China will produce 900,000 metric tons of lithium annually, compared with 680,000 tons from Australia, 435,000 tons from Chile, and 380,000 tons from Argentina. Analysts say this continued expansion is sustained not by market profitability but by policy incentives, pressure from local governments to maintain employment, and Beijing’s long-term industrial ambitions.
“This continued production — despite the lack of profitability within the market — starts to make a lot more sense when you consider all those factors,” Lusty added.
While lepidolite mining is costlier and poses environmental risks due to by-products such as thallium and tantalum, China’s miners have been reluctant to cut output. In addition, China remains the largest lithium refiner, with around 70% of global capacity — a share expected to fall to 60% by 2035 as other nations expand refining efforts.
Beyond raw materials, China also maintains dominance in the EV sector, accounting for over 60% of global electric vehicle sales in 2024, according to data from LG Energy Solutions.